NEW YORK (TheStreet) -- Rio Tinto (RIO) - Get Report plans to boost output from a bauxite deposit in the Cape York Peninsula of northern Australia after the mining company approved a $1.9 billion project called Amrun.
The project will include the construction of a mine and related facilities to extract bauxite, a material composed of multiple minerals, mostly aluminum hydroxide minerals, and used for several purposes, including cement and chemicals.
Initially, Rio Tinto plans to extract 22.8 million metric tons of bauxite a year at the Amrun project, which will replace the East Weipa mine.
"In addition to generating attractive returns, with mining costs in the first quartile of the industry cost curve, [Amrun] will provide jobs and strengthen the economy for the people of Cape York and Queensland for many decades," CEO Sam Walsh said in a statement.
Production will begin in the first half of 2019 and could reach 50 million metric tons a year.
"Amrun will be significant in helping to meet growing bauxite demand from China," Walsh added.
Rio Tinto stock is falling 1.96% to $33.01 in midday trading on Friday.
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